Several agreements signed in March between Morocco and Senegal, Côte d'Ivoire and Gabon are helping to consolidate the kingdom’s economic ties with West and Central Africa as the global slowdown continues to
weigh on trade with the eurozone, the country’s primary trading and investment partner,Global Arab Network reports according to OBG..
In a bid to reduce its trade deficit and fuel economic expansion – which eased to 2.9% in 2012, down from 4.9% in 2011 – Morocco is looking to boost trade beyond its traditional markets and strengthen relations on the African continent. While the past decade has seen some 500 agreements signed in a variety of sectors with more than 40 nations, business with other African nations still only accounts for around 5% of the country’s foreign trade.
Morocco has been looking to change this for several years now, but momentum is beginning to increase, particularly in the wake of King Mohammed VI’s official visits to Senegal, Côte d'Ivoire and Gabon in March 2013. Indeed, capital investment and acquisitions by Moroccan firms in West Africa have already been significant, particularly in the banking, telecoms and insurance sectors. This is part of a broader attempt to boost cooperation in the region, an effort that has been under way since the early 2000s. During the Africa-Europe Summit in 2000, for example, Morocco cancelled all debt owed to it by Africa’s least-developed countries and removed Customs duties on their exported products to the Moroccan market.
As a result, trade between Morocco and sub-Saharan African countries increased by 300% from 2000 to 2010, rising from Dh3.6bn (€322.27m) to Dh11.7bn (€1.05bn). Imports from the region rose from Dh2.1bn (€187.99m) to Dh4.5bn (€402.84m), while exports increased from Dh2.1bn (€187.99m) to Dh7.2bn (€644.55m). Morocco’s main regional export markets are Senegal, Côte d'Ivoire, Equatorial Guinea and Nigeria, which together absorb about 41% of Moroccan exports to the region. In 2010 food exports accounted for some 37% of total trade with the region, followed by transport machinery and equipment (21%) and chemicals (20%). Despite this progress, trade with sub-Saharan African countries remains low, accounting for just 2.6% of Morocco’s total commercial exchanges. This could set to change, however, after recently signed bilateral agreements that Morocco has entered with Senegal, Côte d'Ivoire and Gabon take effect.
In mid-March Morocco signed two bilateral agreements with Senegal, the first of which focuses on enhancing connectivity for the transport of goods and people by road. The second agreement aims to increase cooperation in the energy, mining, electricity and renewable energy sectors. These accords should serve to contribute toward trade flow between the countries, which grew by 214% between 2000 and 2010, rising from about CFA9.7bn (€14.79m) to CFA30.5bn (€46.49m).
In the same month Morocco also entered six cooperation agreements with Côte d'Ivoire in different sectors, including fisheries and aquaculture, aviation and professional training in tourism. These agreements were followed by six more with Gabon in the agriculture, fisheries, health, and information and communications technology sectors.
Moroccan firms have already had a number of successes in Gabon, particularly with the introduction of Attijariwafa Bank and Maroc Telecom, which holds a 51% stake in Gabon Telecom. Meanwhile, exports from Morocco to Gabon have grown by an annual average of 7.99% between 2008 and 2011.
Senegal is also familiar with a number of Moroccan firms, notably in the banking sector. In 2007, for instance, Attijariwafa acquired a majority stake in Banque Sénégalo-Tunisienne and did the same in the Compagnie Bancaire de l'Afrique Occidentale in 2008. Exports from Morocco to Senegal grew by an annual average of 6.22% between 2008 and 2011.
More recently Moroccan firms have taken increased interest in the real estate sector in Côte d'Ivoire, with the first agreement signed in November 2012 with Moroccan firm Groupe Addoha to take part in the construction of some 2600 social housing units. A second agreement was concluded in December 2012 with Moroccan Alliances Développement Immobilier (ADI) to build 7000 homes in Abidjan and its surroundings.
Being able to increase trade with other countries on the continent would ease the effects of the slowdown in Europe. Morocco has seen a slowdown in trade with the eurozone, the country’s primary trade partner. The trade deficit hit record heights in 2012, reaching Dh197.2bn (€17.65bn), and the country’s import bill, exacerbated by a rise in energy and food costs, increased by 6.3% year-on-year (y-o-y) to reach Dh381.7bn (€34.17bn). While exports rose 4.7% y-o-y to Dh183.2bn (€16.4bn), this figure was considerably lower compared to the previous year, when growth increased 16.3% y-o-y.
Given Morocco’s ambition to become a gateway to Africa, enhanced South-South cooperation should contribute toward consolidating its presence throughout the continent and ensuring sustainable economic growth. The hotly anticipated free trade agreement with the West African Monetary Union – first signed in 2002 but not yet enacted – is also expected to play a major role in boosting trade flows and contributing toward human development.